Consolidation prize

B2C Services is big business – around £80bn in the UK alone – but in contrast to retail, most B2C services markets are highly fragmented: the top players in aggregate often account for less than 20% of share, and independents thrive.

However, a number of recent developments – ranging from evolving consumer demand to technological improvements and regulatory changes – mean it’s time to reconsider the case for consolidation over the coming decade. Even taking into account these recent developments, OC&C’s experience suggests only some B2C Services markets will consolidate profitably, and that others will remain fragmented. The determining factor is how the customer buys: are independents always going to be advantaged because the customer values the personal relationship, or can an innovative scale player deliver a differentiated proposition that the customer prefers?